True identity: as May's deadline for implementation of the National Provider Identifier approaches, health plans are working hard to modify and test systems and educate providers about what they need to do to gear up.

Key Points

* Most health plans must use National Provider Identifiers in standard transactions by May 23.

* As of the beginning of this year, only about 60% of providers had obtained their NPIs.

* Health plans are testing systems and reaching out to providers about the importance of obtaining their NPIs.

As the clock ticks toward the May 23 deadline for implementation of the National Provider Identifier, health plans are in the midst of what some are calling their "No. 1 initiative this year."

For many, the move to the NPI--a unique, 10-digit numeric identifier for providers--has been several years in the making. Many health plans have already changed or modified technologies and business processes. Now they're busy testing systems and reaching out to providers to make sure they're getting ready for the looming deadline.

"On May 23, providers no longer have to use all different plans' proprietary identifiers, which simplifies things for providers. For plans, it means we've all had to go into our systems and change how we identify providers and have to begin using the single provider ID that they send in on their claims on a go-forward basis," said Janna Meek, director of integrated provider-solutions for Humana Inc.

The NPI may also help from a quality perspective, said Dr. Alan Muney, chief medical officer for UnitedHealthcare Northeast. "If we want to perform quality assessment, we have to make sure we're identifying the same physician in the same way in order to perform good measurement and reporting."

NPI is one of the steps the Centers for Medicare & Medicaid Services is taking to improve electronic transactions for health care. Health-care providers began applying for NPIs in 2005. Many health plans, including Medicare, Medicaid and private health-insurance issuers, and all health-care clearinghouses, must accept and use NPIs in standard transactions by May 23. Smaller health plans (those with less than $5 million in annual receipts), however, have until May 23, 2008, to comply.

Providers can apply for an NPI in one of three ways: a Web-based application process, a paper application or an electronic file.

While the initiative is widespread, take-up has been fairly slow. At the beginning of this year, CMS estimated that only about 60% of providers had obtained their NPI.

On Our Way

"This is an extremely busy and focused time for health plans," said Joan Jennerjahn, senior director of contracting and provider networks for Independence Blue Cross.

For the past year and a half, the Philadelphia-based company has had cross-functional teams dedicated to the project, evaluating resources, interfaces, applications and provider networks to determine what changes needed to be made to handle the NPI when it comes in on claims, she said. In addition to a number of internal applications, more than 30 external vendors and nearly 100 processes had to be modified or changed in order to support the NPI, she said.

"We built a crosswalk, which takes the NPI and matches it to a health plan's current ID used for inbound transactions and then converts those identification numbers back to NPIs for outbound transactions. We've also reached out to providers to ensure we're communicating effectively and frequently with them. Not only do we need to be ready, but providers also have a lot of work to prepare for the implementation. For that reason, we've built a robust Web site to help providers learn more about NPI and what they need to do to be compliant," Jennerjahn said.

Another step is testing transactions with NPIs that carriers already have received from providers. Since many providers send claims in through clearinghouses, they will continue through the implementation date to ensure systems are up and running, said Tom Wilder, senior regulatory counsel with America's Health Insurance Plans.

Aetna's gone down a similar path. The company initially focused on getting its systems and databases ready, in addition to educating provider service-center staff and ensuring its business areas look at their own internal processes, said Paul Hebert, Aetna's head of provider data services and credentialing.

"We've also held discussions with large provider groups and individual providers, educated our contractors and those with direct relationships with providers, and continue to offer information in a variety of ways--from our Web tool to direct mailers to providers. We've educated them about their responsibilities, our readiness and how to best communicate with us once they go through the enumeration [register with CMS] process to provide us with their NPI," said Hebert.

He said Aetna also held a series of strategic meetings to discuss how it can best use information it receives from providers and enhance its business processes. "We have more than 50 ideas of things we can change," he said. "That starts to happen post-May 23 as we start to see our interaction with providers take off with the NPI. It will also help improve our identification. There's sometimes the challenge in having three or four doctors with the same name in a city. NPI will help us narrow that down to the individual provider we need to pay."

A number of health plans implemented a dual-use period prior to May 23 in which providers are able to submit their NPI along with the health plan's provider numbers on electronic claims. "We can't require someone to send an NPI as well as their legacy, but we will have that ability," said Anne Quigg, director of portal management for Horizon Blue Cross Blue Shield of New Jersey. She also said the company has a robust EDI gateway in place that can validate the ability to process claims submitted during dual usage.

Peggy Wiley, senior project manager in the enterprise project-management office at Regence, said the company is now "pursuing the last pieces of implementation--focused mainly on business processes and functionality that will enhance our relationships with our members and providers. For Regence, the entire NPI effort is about $6.4 million, spanning across all four [member] plans and touching 25 to 30 systems/applications."

Reaching Out

Much of the work around NPI lies in the hands of providers.

"It's truly up to providers to decide how and when they'll enumerate," said Horizon's Quigg.

Health plans are aiding in that effort. Regence is one of a handful of carriers that have posted provider NPI training documentation on their Web sites. Regence also sends out quarterly newsletters and voucher stuffers to providers requesting they obtain and submit an NPI.

Ready, Set, Go

Many health plans said they're on target for the May implementation deadline.

"Our systems are in place and we're continuing to do a lot of internal testing to make sure everything is ready by May 23," said Humana's Meek. She said a number of providers have already begun submitting their NPIs to the company, "so we're loading them into our systems and getting ready to go."

But are providers ready? "It's a mixed bag," said Aetna's Hebert. "We immediately received NPIs from some providers but not all. CMS has done a good job getting out information for those providers who may not be aware of what they need to do or those who are hesitant or slow on enumerating. Large hospitals and medical groups are familiar with what NPIs can provide; smaller single providers are just beginning to realize what the NPI can do for them."

"There's a challenge in the provider community because there's still some confusion around the requirement and what it means to providers," said Jennerjahn. "Some are enumerating but aren't sharing their NPIs with us." Independence Blue Cross requires when providers enumerate they also register their NPI with the company. "Industry statistics say only about 45% of providers have enumerated; a little more than 50% of our providers have registered their NPIs with us, due in part to our aggressive provider outreach."

Several organizations, including AHIP and the Workgroup for Electronic Data Interchange, are urging CMS to extend the May deadline for transitioning to the NPI.

"[WEDI] is concerned that as providers in some cases just begin to enumerate, that doesn't leave us much time to test and ensure transactions work with providers," said Hebert. "They're asking for the opportunity to use some additional time to test transactions post-May 23."

Health plans say they're ready no matter what CMS decides. "We're prepared to go on May 23. However, if CMS decides to acknowledge an extension, we're prepared to work that from a systems point of view as well. We will be flexible," said Humana's Meek.

Ups and Downs 

The industry's scramble to move to the NPI hasn't been without a few bumps in the road along the way.

"The task of reaching out to all providers and getting their NPIs from them has been a big undertaking for everyone in the industry, particularly for institutional providers who may have various subparts," said AHIP's Wilder.

There also have been looming provider misconceptions. "Many physicians were concerned that if they don't get an NPI they won't get paid," said Humana's Meek. "That's been the biggest challenge in ensuring that providers are aware, understand and react to obtain an NPI."

Technology changes also have kept insurers busy. "Most insurers have selected using crosswalks to meet the time frame required," said Quigg. "One of the biggest challenges was shoring up our legacy systems and introducing technologies we knew had to perform at subsecond levels and being able to integrate that kind of technology."

For Aetna, the biggest technology challenge came in preparing its provider database to receive NPI information and handle the multiple-to-one situations where providers may be identified as one personal ID but may have multiple NPIs coming in, said Hebert. "We were ready to go in summer 2006, giving us ample time to test, and we continue to test today in all different scenarios."

A Forrester Research report, HIPAA's Last Stand: The National Provider Identifier, looked at challenges surrounding the NPI, including that payers will need to match NPIs with the correct reimbursement arrangement, particularly because many health plans often enter into several agreements with providers depending on the product or the place of services. The result? Payers will be forced to assign multiple IDs to a single provider to represent the arrangements because of the difficulty in creating a proper match, according to the report.

Time is also of the essence. "Once a provider receives or obtains their NPI from the enumerator, there are about 120 days required from receipt to actual implementation on part of the provider and payer," said Wiley.

Land of Opportunity

The real benefit from the NPI will be felt on the provider side, said Aetna's Hebert.

"If you think of all the sign-ins and passwords we have on our computers and the Internet, imagine if they all were the same and we didn't have to remember all of them. Providers have to remember things like our PIN number and other plans' numbers. This will be helpful to them in having only one 10-digit number to recall," he said.

Health plans also will benefit. "There's opportunity for us to continue to look at and evaluate the way in which we do business with our providers and streamline some of our processes: said Jennerjahn. "We're already beginning to identify some of those opportunities."

NPI also may help reduce some costs. A recent news release from software provider Enclarity said that provider data ambiguity costs health plans an estimated $26 billion a year in inaccurate claims and misdirected bills, as well as fraud and abuse.

The NPI is a partnership between payers and providers, said Hebert. "We need to work together to make sure all this works, benefits all of us and delivers on its initial concept--administrative simplification."

Learn More

Aetna Health and Life Insurance Co.

A.M. Best Company # 08189

Distribution: Brokers, consultants, retail network (pharmacy products)

Horizon Healthcare Services Inc.

A.M. Best Company # 64022

Distribution: Brokers, benefit consultants, direct

Humana Health Plan Inc.

A.M. Best Company # 68898

Distribution: Agent/brokers, direct to employees, direct

Independence Blue Cross

A.M. Best Company # 64553

Distribution: Direct sales representatives, brokers, association administrators, consultants, direct

Regence Blue Cross Blue Shield Cos.

A.M. Best Company # 60074, 60199, 60266, 64412

Distribution: Agents and brokers, direct

United HealthCare Insurance Co.

A.M. Best Company # 08290

Distribution: Independent agents, brokers, consultants, exclusive sales force, direct

For ratings and other financial strength information about these companies, visit www.ambest.com.

RELATED ARTICLE: What Is the National Provide Identifier?

For years, health plans assigned identification numbers to health-care providers. Providers who conducted business with multiple plans, however, were faced with multiple IDs. Now that's about to change.

The National Provider Identifier is a unique identification number that will replace health-plan provider identifiers currently being used for the Health Insurance Portability and Accountability Act standard transactions. Those numbers include payer-specific and Medicare-legacy IDs. Anyone who uses standard electronic transactions, such as electronic claims, eligibility verifications, electronic remittance advice transactions and claims status inquiries, is required by federal law to have an NPI on those transactions.

Initially proposed as an eight-position alphanumeric identifier, the NPI has metamorphosed to a 10-position numeric identifier with a check digit in the last position to help detect keying errors. It's also intelligence-free--meaning it doesn't carry information about health-care providers such as their specialization or state in which they're located.